New Forest


Charity rates relief

Charitable organisations in England can obtain a mandatory 80% reduction in business rates on any property it occupies and uses wholly or mainly for charitable purposes, with local authorities able to offer a further 20% discretionary relief. A recent Supreme Court case (London Borough of Merton v Nuffield Health) has confirmed the test for eligibility for this relief. The case hinged on whether a local authority could apply a local public benefit test at each individual site, distinct from the charity law test applicable to the charity’s operations overall, as regulated by CCEW.

Fortunately in this case the charity won the day, and the judgement avoided the potentially confusing situation that could arise where local authorities could determine what constitutes public benefit, preserving charity law’s jurisdiction over this issue. As a result, any registered charity will be able to claim mandatory rates relief on any property “wholly or mainly used directly for activities which constitute the carrying out of the charitable purposes of the charity or, by a modest extension, for activities which directly facilitate or are wholly ancillary to the carrying out of those purposes.” This will include properties used for activities such as fundraising, head office management, investment, and the provision of staff accommodation.

The Court in reaching its decision, also helped clarify some issues surrounding what constitutes public benefit which have a more general application, particularly for charities that operate across multiple sites.

For those interested in this case, a more detailed analysis has been published by the Charity Tax Group.


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